Picture-Illustration: Intelligencer
On SEC-filed paper, Google’s mother or father firm Alphabet is in nice form. Each necessary a part of its enterprise is rising. It nonetheless owns the world’s primary interface for the online. It’s the most important promoting firm on the planet, raking in tens of billions of {dollars} in revenue within the first months of the yr, elevating dividends, and authorizing inventory buybacks.
It’s additionally an organization with, reasonably all of the sudden, quite a bit to fret about. The federal government is at the moment threatening to interrupt it up, with a selected deal with cleaving off Chrome, the preferred browser on the planet, and a supply of monumental visitors to Google’s advert enterprise (firms which have expressed curiosity in shopping for it lately embrace OpenAI and Yahoo, which referred to as it “arguably an important strategic participant on the net.”) And whereas Google’s earnings recommend a wholesome search enterprise, the corporate is nonetheless within the technique of overhauling it utterly, spooked by the recognition of ChatGPT, apprehensive about promoting competitors from Amazon, and making an attempt to get out in entrance of an online that’s struggling one thing akin to ecological collapse.
As Google tells it — together with nearly each main tech firm in 2025 — the way in which ahead is AI in every single place and in every thing. Most clearly for Google, it means new search options, Gemini chatbots throughout its product vary, and a fast remaking of a few of its core manufacturers, from Docs to Gmail to Android, with LLMs. Much less visibly, it means enterprise AI instruments, new advert concentrating on tech, and promoting AI options (or labor) by Google Cloud. For now, the connection between AI and Alphabet’s precise enterprise is difficult to tease out. It’s spending some huge cash, in fact, and it’s making some claims. Sundar Pichai emphasised that its Search Overviews, the AI-generated blurbs on the prime of search pages, now have “1.5 billion customers per 30 days,” which is an terrible lot of individuals. But in addition, how couldn’t they? Google turned them on by default for many customers, and now they seem routinely. If Google had higher AI information than this, it in all probability would have shared it.
What Google did share have been a couple of different clues about what a post-Google Google may appear like, or no less than a Google wherein internet search isn’t the agency’s major enterprise, neither of which is primarily about AI. One is that YouTube, the scale and income of which Google didn’t begin disclosing till 2020, now accounts for practically a tenth of Alphabet’s complete income, and remains to be rising shortly. (For the previous few years, it’s additionally outranked Netflix, which is often portrayed because the standard-bearer for streaming, when it comes to viewing time on precise televisions, which could sound both utterly apparent or utterly insane, relying in your age.) Corporations like Netflix have a reputable declare over the way forward for TV distribution, however YouTube brings with it a novel economic system of TV manufacturing, too.
The opposite unusual merchandise in Google’s report was a line about paying clients. “Pushed by YouTube and Google One, we surpassed 270 million paid subscriptions,” the corporate mentioned. YouTube gives an ad-free tier, which is comparable in worth to a streaming service, and YouTube TV, a fast-growing and dearer cable various. There’s additionally YouTube Music, which is usually bundled with YouTube Premium, a Spotify competitor. These are pretty easy subscription merchandise, within the sense that individuals pay for them in an effort to get one thing new or completely different: Entry to media, reduction from adverts, and extra options.
Google One, nonetheless, is one thing else, and sure accounts for a big portion of that 270 million. On the prime tier, it’s a bundle that features entry to Google’s newest AI fashions. On the way more standard backside tier, which prices $2 a month, it’s only a means to purchase extra storage when your Gmail account is full, otherwise you need extra space for pictures taken together with your Android cellphone. It’s Google’s model of iCloud+, which has additionally been a quietly huge income for Apple. These are a unique type of subscription product, much less elective than needed and fewer marketed than straight induced. (I’d wager most “subscribers” to Google One, who begrudgingly consented to a $2-a-month inbox toll, aren’t accustomed to the official identify of it.)
Even with out the speculative narratives of AI, this means the potential for a really completely different Google within the coming years. Google grew right into a $2 trillion firm primarily by making a gift of its merchandise without cost and charging advertisers for entry to its customers; now, a few of its fastest-growing companies with probably the most room to increase are issues clients count on, or are anticipated, to pay for.
